Last updated 2026-07-22
TL;DR
An assisted living community is a state-licensed residential setting where people who need help with daily tasks like bathing, dressing, and medication get that support without full-time skilled nursing. It differs from a nursing home (medical, often Medicare-certified) and overlaps with smaller group homes (same idea, fewer residents). Medicare generally won't pay for room and board; Medicaid sometimes covers services through a waiver.
What is assisted living?
Assisted living is a type of housing built for people, usually older adults, who need help with daily activities but don't need the round-the-clock medical care a hospital or skilled nursing facility provides. Think meals, housekeeping, medication reminders, help getting dressed or into the shower, and staff on-site to respond if something goes wrong. The National Institute on Aging describes assisted living as a middle ground: more support than living alone at home, less clinical than a nursing home [1]. Every state runs its own licensing program for these communities, so the exact name (assisted living facility, residential care facility for the elderly, personal care home, adult care home) and the specific rules change depending on where you are. That's why the first real step for anyone opening one isn't a business plan. It's finding your state licensing agency's rulebook. If you're comparing this option against smaller-scale settings, our assisted living guide walks through how state definitions differ from one another.
What is an assisted living facility, exactly?
An assisted living facility is the licensed building and program itself, the physical community plus the staff, policies, and state approval that let it legally house residents and provide personal care. "Assisted living" describes the model of care; "assisted living facility" describes the licensed entity that delivers it. Most states license these facilities under a specific statute or regulation chapter (names vary: assisted living facility, residential care facility, personal care home) and require a separate license per physical location, not per company. A facility typically has its own administrator, its own staffing plan on file, and its own inspection history with the state agency. Two locations run by the same company are two separate licenses, two separate inspection records, and often two separate sets of local zoning approvals. Because the label differs by state, don't assume a rule you read about in one state's assisted living facility statute applies elsewhere. Confirm with your state licensing agency before you build a program around it. Our state-specific pages on what counts as an assisted living facility break down where those definitions diverge.
What is a group home, and how is it different from assisted living?
A group home is generally a smaller residential setting, often housing somewhere between four and sixteen residents, that provides supervision and support in a house rather than an institutional-feeling building. In practice, a lot of group homes and assisted living communities do nearly identical things: help with bathing, dressing, meals, medication, and daily supervision. The real differences are usually size, licensing category, and population served, not the care itself. States commonly license small group homes under a separate, lower-tier category than large assisted living facilities, sometimes with lighter staffing ratios or different fire and building code thresholds tied to resident count (a facility with fewer than a certain number of residents, commonly six, often triggers a residential rather than commercial building code in many states, though thresholds vary). Group homes also serve a wider range of populations: seniors, adults with intellectual or developmental disabilities, people in mental health recovery, or people in substance use recovery, while "assisted living" as a licensing category is usually built around older adults. If you're deciding which license category fits your planned resident count and population, that decision drives almost everything else: your building code, your staffing ratios, and your application fee. Get it wrong on paper and you may have to reapply under a different category months into the process.
What does assisted living provide day to day?
Assisted living typically provides help with what's called activities of daily living (ADLs): bathing, dressing, toileting, transferring (moving from bed to chair), and eating, plus instrumental activities like managing medication, laundry, and housekeeping. Most communities also provide three meals a day, 24-hour staff availability for emergencies, social activities, and transportation to appointments. What it generally does not provide is ongoing skilled medical care: IV therapy, ventilator management, wound care beyond a basic level, or the kind of clinical oversight a registered nurse provides around the clock in a nursing home. AHCA/NCAL's industry data describes assisted living staff as providing personal care and health-related services, with medication assistance being one of the most common supports, though scope of practice for staff (who can and can't administer medication) is set state by state [2]. A useful way to think about it: assisted living helps someone live their daily life with support. A nursing home treats a medical condition. Some residents move from assisted living to a nursing home when their needs shift from "help me get dressed" to "manage my IV antibiotics."
Assisted living vs. nursing home: what's the real difference?
| Regulated by | State licensing agency | State agency plus federal certification (42 CFR Part 483) [3] | State licensing agency, often a smaller-home category | |
|---|---|---|---|---|
| Typical size | 20 to 120+ residents | Often 60 to 150+ beds | 4 to 16 residents in many states | |
| Level of care | ADL support, not skilled nursing | 24-hour skilled nursing and rehab | Similar to assisted living, home-like setting | |
| Medicare coverage | Generally none for room and board [4] | Up to 100 days of skilled nursing after a qualifying hospital stay, under conditions | Generally none for room and board | |
| Medicaid coverage | Sometimes covers services via HCBS waiver, not room/board [5] | Covers eligible long-term stays for low-income residents | Varies by state; HCBS waivers used in some states | Again, none of this replaces reading your own state's statute. Two states can define "assisted living" so differently that a facility legal in one would need a nursing home license in another. |
The core difference is medical intensity. Assisted living is a residential, non-medical model built around daily living support. A nursing home (also called a skilled nursing facility) is a medical model, federally certified in most cases, that provides 24-hour licensed nursing care, rehabilitation, and treatment for people who need ongoing clinical management. Nursing homes that accept Medicare or Medicaid are certified under federal requirements at 42 CFR Part 483, which set specific rules for nursing services, physician oversight, and resident rights [3]. Assisted living has no equivalent federal certification; it's regulated entirely at the state level, which is a big reason rules and even the name of the license vary so much across states. | Feature | Assisted living | Nursing home (skilled nursing) | Group home |
Does Medicare cover assisted living facilities?
No, not for the housing itself. Medicare's own consumer guidance states plainly that "Medicare doesn't cover long-term care (also called custodial care) if that's the only kind of care you need" [4]. Room, board, and personal care assistance in an assisted living facility fall into that custodial category, so Medicare Part A and Part B don't pay for them. What Medicare can cover, even for someone living in assisted living, are the same medical services it would cover anywhere: doctor visits, physical therapy ordered by a physician, durable medical equipment, and short-term skilled nursing after a qualifying hospital stay (but that skilled nursing benefit is tied to a certified nursing facility or home health agency, not the assisted living residence itself). Some residents carry a Medicare Advantage plan with supplemental benefits that touch on personal care, but that's plan-specific, not a general Medicare rule. Families researching options often assume Medicare works like it does for a hospital stay. It doesn't, and that gap is one of the most common surprises people run into when they start pricing out care.
Does Medicaid help pay for assisted living costs?
Sometimes, but not in the way people expect. Medicaid generally won't pay for room and board in assisted living. What many states do instead is use a Home and Community-Based Services (HCBS) waiver, authorized under Section 1915(c) of the Social Security Act, to pay for the personal care services delivered inside an assisted living setting, while the resident (or their family) still pays the housing and meal costs separately [5]. CMS describes these waivers as a way to let states offer long-term services "in home and community-based settings" as an alternative to institutional care . Not every state runs an assisted living HCBS waiver, and where one exists, it usually has income and asset limits, a waiting list, and a limited number of slots. Some states also cover certain assisted living services through their regular Medicaid state plan rather than a waiver. If you're building a program that expects to serve Medicaid-funded residents, this is a conversation to have with your state Medicaid agency and your state licensing agency early, before you set your rate structure, not after your first resident moves in.
How much does assisted living actually cost?
Nationally, the most commonly cited figure comes from Genworth's Cost of Care Survey, which put the median monthly cost of assisted living at roughly $5,350 in 2023, compared with about $8,669 for a semi-private nursing home room and $9,733 for a private one [6]. These are national medians; actual prices swing widely by state, by region within a state, and by the level of care a resident needs, so treat the number as a rough anchor, not a quote. On the supply side, CDC's National Study of Long-Term Care Providers found roughly 28,900 residential care communities operating in the United States as of 2020, with a combined capacity in the neighborhood of 1.2 million licensed beds [7]. That data set is the closest thing to an authoritative national count, though it's collected periodically, not in real time, so treat any "current number of facilities" claim (including this one) as an estimate with some lag.
How to start a group home or assisted living business
Starting either one follows roughly the same sequence, with the details set by your state and the license category you're applying under. First, confirm with your state licensing agency which category fits your planned resident count and population (senior, IDD, mental health, recovery). That decision affects your building code, staffing ratios, and application forms, so get it settled before you sign a lease. From there, the typical path looks like this: secure a property that meets your state's building and fire code for the resident count you're planning (confirm with your local fire marshal and building department separately from the state license), pass a zoning review with your city or county, write your policy and procedure manual (medication management, emergency plans, resident rights, grievance process), build a staffing plan that meets your state's minimum ratios, complete required background checks and staff training, submit your license application with the required fee (fees vary by state and by facility size; confirm the current amount with your state agency), and pass a pre-licensing inspection before you're approved to accept residents. Writing that policy manual and staffing plan from scratch is where most first-time applicants lose weeks. Our $299 State Group Home Licensing Kit packages the state-specific application checklists, policy manual templates, and staffing plan worksheets into one place, so you're filling in your state's blanks instead of drafting everything from a blank page; you can start with the licensing kit builder for your state. One honest caveat: no kit, consultant, or checklist can promise approval or a faster timeline. Every state agency reviews applications on its own schedule, and inspection outcomes depend on your actual property and staff, not on paperwork alone.
What licensing, staffing, and inspection rules should you expect?
Expect three layers of oversight: a state licensing survey (usually annual, sometimes tied to a complaint or renewal cycle), local fire and building code inspections, and, if you accept Medicaid HCBS residents, a program-level review from your state Medicaid agency. Each layer has its own paperwork and its own inspector. Staffing requirements typically specify a minimum staff-to-resident ratio (often stricter overnight than during the day), required training hours before a caregiver can work unsupervised, and a designated administrator who meets state education or licensing requirements. California, for example, licenses residential care facilities for the elderly through its Community Care Licensing Division, which runs its own facility-specific rules and inspection schedule separate from nursing home certification [8]. Texas licenses assisted living facilities through its Health and Human Services Commission, with its own application and inspection process [9]. Both are useful examples of how state-specific this gets; neither is a stand-in for your own state's rules. Before you submit anything, pull the actual current statute and application packet from your state licensing agency's website. Fee amounts, required forms, and inspection timelines change, sometimes yearly, and a rule you read in an older article or forum post may already be out of date. For a broader look at how these definitions and categories play out across the industry, see our pages on assisted living facilities and, for a lower-footprint model some operators choose instead, assisted living at home programs licensed as adult family or foster-style homes in some states. Families comparing options for a relative, meanwhile, usually start their search with something like our senior assisted living facilities near me resources, and operators researching category-specific rules often land on our facility assisted living licensing pages next.
Frequently asked questions
What is assisted living?
Assisted living is residential housing for people, usually older adults, who need help with daily activities like bathing, dressing, and medication but don't need full-time skilled nursing care. It's licensed at the state level, includes meals and staff availability around the clock, and sits between living independently and needing a nursing home.
What is a group home?
A group home is a small residential setting, typically housing four to sixteen residents, that provides supervision and daily living support in a house rather than a large institutional building. It can serve seniors, adults with intellectual or developmental disabilities, or people in mental health or recovery programs, depending on state licensing category.
What is an assisted living facility?
An assisted living facility is the licensed physical location and program, the building, staff, and state-approved policies that deliver assisted living care. The term describes the licensed entity itself, while "assisted living" describes the care model it provides. Each physical location generally needs its own license.
What is the difference between assisted living and a nursing home?
Assisted living provides non-medical help with daily activities in a residential setting. A nursing home provides 24-hour skilled nursing and medical treatment, and is typically federally certified under 42 CFR Part 483 when it accepts Medicare or Medicaid. Nursing homes serve residents with heavier medical needs; assisted living serves people who mainly need help, not treatment.
Does Medicare cover assisted living facilities?
No. Medicare doesn't cover room and board or custodial care in assisted living. Medicare's guidance states it doesn't cover long-term custodial care when that's the only care needed. It can still cover doctor visits, therapy, and short-term skilled nursing elsewhere, but not the assisted living stay itself.
How do I start a group home?
Confirm your state's licensing category for the population and resident count you plan to serve, secure a property that meets building and fire code, pass local zoning review, write a policy and staffing manual, complete background checks and training, submit your application with the required fee, and pass a pre-licensing inspection. Every state's specific requirements differ, so start with your state licensing agency's current application packet.
How much does assisted living cost per month?
Genworth's 2023 Cost of Care Survey put the national median around $5,350 a month for assisted living, though actual costs vary widely by state and by the resident's care needs. Compare that to roughly $8,669 for a semi-private nursing home room in the same survey. Treat these as rough national anchors, not local quotes.
Do assisted living facilities accept Medicaid?
Medicaid generally doesn't pay room and board in assisted living, but many states cover personal care services delivered there through a Home and Community-Based Services (HCBS) waiver. Availability, income limits, and waiting lists vary a lot by state, so check with your state Medicaid agency for current rules.
What's the difference between assisted living and independent living?
Independent living is housing for people who don't need daily care help; it usually offers amenities and social activities without personal care staff. Assisted living adds licensed staff support for activities of daily living like bathing, dressing, and medication management, and it's regulated as a care setting, more than housing.
How long does it take to get an assisted living license?
Timelines vary a great deal by state and by how complete the application is when submitted, so there's no reliable national average to quote. Expect the process to include an application review, background checks, plan review for the building, and a pre-licensing inspection. Confirm current processing timelines directly with your state licensing agency.
Can you run a group home and an assisted living facility under the same license?
Usually no. Most states treat group homes and assisted living facilities as separate license categories with different resident-count thresholds, staffing ratios, and building code requirements. If you plan to operate both models, expect to apply for and maintain separate licenses, even if you use the same company name.
What staffing is required in an assisted living facility?
Requirements vary by state but typically include a minimum staff-to-resident ratio (often higher during the day than overnight), a licensed or certified administrator, required training hours before unsupervised work, and background checks for all staff. Some states also require a specific number of hours of dementia or medication-management training annually.
Is assisted living the same as memory care?
No. Memory care is a specialized level of care, sometimes a separate wing or building, designed for residents with Alzheimer's disease or other dementias, usually with higher staffing ratios and secured entry points. Many assisted living communities offer a memory care unit, but standard assisted living licensing doesn't require those specific protections.
Sources
- National Institute on Aging, Residential Facilities, Assisted Living, and Nursing Homes: Definition of assisted living as a middle ground between independent living and nursing home care
- Medicare.gov, Long-term care coverage: Medicare doesn't cover long-term custodial care, including assisted living room and board
- CDC/NCHS, National Study of Long-Term Care Providers: Approximately 28,900 residential care communities with about 1.2 million licensed beds in the U.S. as of 2020
- Medicaid.gov, Home & Community-Based Services: Medicaid can cover personal care services in assisted living via HCBS waivers, not room and board
- American Health Care Association/National Center for Assisted Living, Assisted Living Facts and Figures: Assisted living staff commonly provide personal care and medication assistance as core services
- Electronic Code of Federal Regulations, 42 CFR Part 483: Federal requirements for Medicare/Medicaid-certified nursing facilities, including nursing services and resident rights
- Genworth, Cost of Care Survey 2023: Median monthly costs for assisted living versus nursing home care nationally in 2023
- Texas Health and Human Services, Assisted Living Facilities: Example of a state agency licensing process for assisted living facilities
- Medicaid.gov, Home and Community-Based Services 1915(c) Waivers: 1915(c) waivers let states fund long-term services in community settings as an alternative to institutional care